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Press Release

Q & A: The MMS Plan for Offshore Oil Drilling

The Outer Continental Shelf (OCS) leasing program is administered by the Minerals Management Service (MMS), an agency within the US Department of the Interior responsible for oil and gas leasing in the US offshore. Every five years, the MMS prepares a Five-Year OCS leasing program which indicates the size, timing and location of oil and gas leasing that the Secretary of the Interior determines will best meet national energy needs for the five year period following its approval. The Five-Year Plan is created through a six-stage rulemaking process with public input. Citizens have the opportunity to comment on the plan during three stages of the process.

MMS is now in the process of developing a Five-Year Plan to cover the OCS leasing program from 2007-2012. The third comment period is underway – a 90-day comment period on the Proposed Plan. This the third and final public comment period began on August 25th and runs until November 23, 2006. The current comment period contains the Proposal Five Year Plan and the Draft Environmental Impact Statement (DEIS). It is a crucial comment period because it shapes future debate and discussion over the Five-Year Plan.

During its deliberation over the Five-Year Plan, the MMS considers all public comments in determining where and when it will offer future OCS lease sales. In making its determination, MMS considers the economic, social and environmental values of renewable and non-renewable resources contained in the OCS, the potential impact of oil and gas exploration on other resources in the OCS, and the marine, coastal and human environments. These considerations are balanced with the Nation’s energy needs. The Five-Year Plan is prepared in conjunction with an environmental impact statement pursuant to the National Environmental Policy Act.

Why is the Five-Year Plan important?

Recent increases in oil and natural gas prices result from growing US and global energy demand that has not been matched by equivalent increases in available supplies. Federal offshore waters hold the greatest potential for bringing new energy resources to market in the next 5 to 10 years. MMS estimates that there are currently 85.9 billion barrels of oil and 419.9 trillion cubic feet of natural gas that are technically recoverable from all federal offshore areas. Allowing access to these resources would significantly reduce US reliance on imports and improve domestic energy security. Offshore development is in the US national interest as a means of improving energy security, diversifying supply, increasing economic development, and generating local, state and federal revenue. Our energy future lies in the safe and effective production of offshore oil and natural gas development.

Oil and gas producers are exploring and developing in virtually all of those areas on the OCS where it is currently permissible. If the Nation is going to increase domestic energy supply, more areas need to be made available for leasing. Current Congressional moratoria have placed off-limits more than 85 percent of the OCS around the lower 48 states. In the current Proposed Five-Year Plan, MMS is asking for public comment on some areas in the Gulf of Mexico that are not under moratorium but that were not offered for leasing in the current Five-Year Plan. Additionally, MMS is asking for public comments on areas where drilling is currently under moratorium, in the North Aleutian Basin Planning area off of Alaska and off the Atlantic Coast of Virginia. In order for new areas to be made available for leasing under the next Five-Year Plan, citizens must comment in favor of leasing. Otherwise, exploration and production will be limited to existing mature areas where production is beginning to peak and where supplies will decline in the coming decades.

Why should I comment on the Five-Year Plan?

Everyone can make a difference. MMS considers all public comments. The comment periods are the basis of determining where future leasing can occur. During the previous two comment periods, positive comments out-weighed negative comments by a ratio of almost 3 to 1, with total positive comments exceeding 38,000. However, opponents of energy production are more likely to mobilize during this comment period. It is absolutely essential that all citizens affected by high energy prices and limited supplies comment in favor of expanded access during this comment period. If you want more supply and more reasonable prices in the future, you should comment on the Five-Year Plan and make sure that your friends and colleagues comment as well.

Finally, we have all seen the devastation to the Gulf Coast Region from Hurricane Katrina. A large percentage of our nation’s energy production comes from this region. Unless we further diversify the energy supply, we leave ourselves vulnerable to disruptions and price spikes as a result natural disasters such as Katrina.

Will energy prices go down if additional offshore areas are opened for oil and gas production?

Energy prices are a reflection of global supply and demand. The recent increase in oil and natural gas prices resulted from growing US and global demand for these products that has not been matched by an equivalent increase in available supplies.

Increasing supplies through production in new areas of the OCS in the Gulf of Mexico as well as offshore Alaska and the Atlantic could help the situation. However, it is not a quick fix. To make a meaningful impact on US energy security, development must begin as soon as possible. Access to additional energy resources is a positive for long-term energy supply, which ultimately influences prices.

What are the specific areas that should be addressed in the Five-Year Plan?

You should comment favorably on all areas that MMS has included in its Proposed Plan. Specifically, we recommend that you comment favorably on allowing leasing offshore Alaska, including Bristol Bay in the North Aleutian Basin, the Beaufort and Chukchi seas, as well as expanded leasing in the Gulf of Mexico and new leasing offshore Virginia.

Consistent with the Secretary of Interior’s August 2005 commitment, the Proposed Plan does not include Eastern Gulf of Mexico or Sale 181 acreage located within 100 miles of the coast of Florida.

Is oil and gas development compatible with the environment and with fishing and other activities?

Offshore oil and gas development has an outstanding safety and environmental record. The National Academy of Sciences recently determined that less than 1 percent of all oil entering the seas is from drilling and extraction activities.

The fishing industry and offshore oil and gas industries can co-exist successfully, as evidenced by the Gulf of Mexico, Norwegian North Sea and the Cook Inlet. In fact, offshore platforms provide critical habitat to reef fish species and are highly valued by both commercial and recreational fishermen. While localized impacts on fisheries and catch rates have occasionally been noted, extensive studies of fishery trends within oil and gas development areas have not indicated negative impacts of fishery populations or quality. In fact, studies indicate that over-fishing by large-scale fishing operations has a far greater impact on global fishing populations than oil and gas exploration and recovery operations. For example, Norway’s oil and gas offshore operations have safely and effectively co-existed with fishing operations in the fertile North Sea since 1971. In fact, Norway is now the world’s sixth largest oil producer and the tenth largest fish producer. The Gulf of Mexico has produced offshore oil and gas for 58 years and the Cook Inlet, Alaska has produced for 40 years.

What’s in it for the adjacent coastal states and local communities?

Domestic oil and gas development has a positive impact on the US economy and on the federal treasury because it creates jobs and reduces US reliance on imports. About 1.5 million people are directly employed by the oil and gas industry and about 45,000 people are directly employed by offshore operations.

Oil provides 97 percent of US transportation fuel. Manufacturers and farmers depend on petroleum to get their products to market. Clean-burning natural gas provides over 20 percent of the total US energy – generating about 23 percent of electric power, supplying 60 million households and providing over 40 percent of all primary energy for industrial use. US oil and gas production contributes more than $6 billion annually to the US treasury – second only to Federal income tax payments.

Any monies generated by expanded offshore access should properly be shared between the federal government and individual localities and states located near offshore oil and gas activities. Congress is considering initiatives that would approve such revenue sharing. While not part of the MMS process, revenue sharing would provide a tremendous benefit once MMS leasing activities commence. It is important that citizens take this opportunity to call for revenue sharing with states and localities.